Breaking Square | 14 June 24

The more I look at the new legislation changes to tenancy laws, the more I realise we need to stay ahead of the curve, particularly in regards to rent increases. It will be tricky and probably means higher rent increases in some instances. We are now required to inform buyers, if they are buying a property with a tenant in place or if the property had been recently rented, when the last rent increase occurred.

As part of our process of providing rental appraisals for would-be buyers, we will now need to specify what the current rent is and when it last was increased and what we believe the next rent increase should be. All of these changes are designed to protect tenants and possibly stem the rent increases. Again, government is limiting the appeal of property investment.

On another note, the Queensland Government handed down its budget, despite the huge handouts and the usual theme of trying to save their grip on power, one element will have an impact on the real estate market. The thresh hold for stamp duty on property purchases for First Home Buyers has been increased to $700,000, up from $500,000. This will certainly entice more buyers into the market, with most of the purchases being centred around apartments, particularly for those wishing to live near the city.

I think these is an opportunity for owners of apartments in this price band to take advantage of the interest that will come with this, as I sense more buyers will compete for these properties and push prices up. When you do the exercise of how much the borrowing capacity increases, these buyers will have more buying power and can spend that extra on the purchase. Couple this with the Australian Government’s assistance of underwriting loans with only a 5% deposit with no mortgage insurance, it’s a boon for first home buyers.

The RBA meets next week and it is largely considered that rates will stay on hold. There are too many mix messages in the economy at the moment and given the latest budget hand outs that have been announced across the nation by every state, the RBA will be keen to wait and watch, I simply don’t think they have any choice but to do so. Government is not making it easier for them and the smoke and mirrors of temporarily lowering inflation will be seen through. It’s now a question of, will these measures be inflationary?

On the rental front, some properties are renting very quickly and others are just taking that bit longer. There appears to be no rhyme or reason for it. I am still witnessing a number of properties sitting on the market, despite the lack of listings, despite this, we press on as the right tenants always appears.

Our sales continue to be strong and prices are holding. However, it is a strange paradox; sellers are hearing price increases and buyers are hearing no rate cuts or even rate hikes, so the 2 parties are at opposites ends in terms of confidence. With unemployment dipping again, most folks should feel safe in their job and even with an extended period of rates being left at current levels, most buyers can’t or won’t sit on the sidelines for too long. Eventually they capitulate and jump back in, and strangely enough, they all do it at the same time.

As we near the end of the financial year, it will be prudent to start to get all your financials in order for your accountant. We will automatically send you your Income and Expenses statement in July, best to forward this immediately to your accountant, even if they are not preparing your return for some time, at least they have it. If you need updated appraisals on your property, please let me know, happy to provide this. Don’t forget, depreciation schedules are handy, if you don’t have one, you should make a point of getting one done.

As I may have mentioned, I will be travelling overseas next week, departing 18 June and returning 11 July. I will have my computer and be checking in every day, so will be able to keep abreast of things and our team is still around, so can manage any of the inspections that may be required. I have alerted all our tenants and requested they use the tenant app to communicate. I will be able to respond to you if need be, just remember there will be a time delay.

I am open to may recommendations, we are travelling to Spain and Portugal. Keen to learn about any off the beaten track bars or cafes, that are away from the tourists.

I still can’t believe we are about to wrap up another financial year. As of 1 July we officially become the 5th office in the Ray White Collective Group. We have big plans for the next financial year and will share them with you in due course.

Until next time, stay safe and be kind.